Hard credit pull for mortgage pre approval

The short answer to this question is no (not really). When you apply for any new forms of credit, lenders check your credit history to get an idea of what kind of borrower you’re likely to be based on the way you’ve managed credit in the past. A track history of on-time payments, paid-accounts, and low credit balances give the lender confidence that you’re likely to manage credit well in the future.

Table of Contents Show

What’s a soft credit check?
What’s the difference between a soft inquiry and a hard inquiry?
Get pre-approved with Better Mortgage
Not All Inquiries are alike
Should You Get a Pre-Approval?
Does mortgage pre
Do pre approvals hurt your credit score?
Do mortgage lenders do a hard pull?

When you complete a mortgage pre-approval form, different lenders use one of two ways to check your credit: some use soft credit checks, others use hard credit checks. So, the long answer to this question needs an understanding of both these types of credit inquiries.

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What’s a soft credit check?

When a lender does a soft credit check (also known as a soft inquiry) they contact one of the three credit bureaus (Equifax, TransUnion, or Experian) to see your credit score based on previous credit inquiries. It doesn’t impact your credit score or leave a public trace on your credit history. However, if you request a copy of your credit report, you will be able to see what companies have done a soft credit check on you. If you receive a promotional letter from a bank that says you’ve been pre-approved for a new credit card, you can be sure that bank ran a soft credit check on you.

A Better Mortgage pre-approval takes as little as 3 minutes and uses a soft credit check to give you a good idea of how much you can borrow without impacting your credit score.

What’s a hard credit check?

When a lender conducts a hard credit check (also known as a hard inquiry), they review your current credit situation with 1–3 of the credit bureaus to see if you qualify for new credit. A hard credit check can be seen on your credit report by other lenders and typically reduces your credit score by 5 points. Given that credit scores range between 300 and 850, on balance, 5 points makes less than 2% difference.

Credit reporting companies recognize that many people shop around for a mortgage, so even if a lender uses a hard credit check for your pre-approval, there won’t be any further impact to your credit score if you complete multiple mortgage pre-approvals within 45 days. After 2 years, a hard credit check will drop off your credit report entirely.

What’s the difference between a soft inquiry and a hard inquiry?

Unlike soft inquiries, hard inquiries are visible on your credit history because they indicate that a lender is either actively considering offering credit to you or has just done so. A high number of hard credit inquiries on your credit report over a short period of time is cause for concern to a lender because it generally indicates that a borrower is going through financial difficulties or may be planning to make large purchases in the near future.

Soft inquiry / Soft credit checkHard inquiry / Hard credit checkNo impact to your credit scoreReduces your credit score by 5 pointsNot publicly visible on your credit reportRemains visible on your credit report for 2 yearsMay be run by a lender to who wants to send you a pre-approved credit cardIndicates that a lender is actively considering extending credit to you (or has just done so)Multiple soft inquiries are of no concern to lenders (they’re not visible to lenders)Multiple hard inquiries over a short period are a red flag for lendersA soft inquiry could be run when:A soft inquiry could be run when:Lenders are deciding whether to send you a pre-approved credit cardLenders process your application for a pre-approved credit cardAn employer runs your credit report as part of their employee screening processCredit card companies want to decide whether to increase your credit limitYou check your credit score through an online site like CreditKarmaYou apply for financing at a car dealership (or another vendor who offers financing)A debt collector checks your credit report for recent activityYou begin the formal mortgage application process (this can occur with some lenders during the pre-application stage)You request a mortgage pre-approval with some lenders

Get pre-approved with Better Mortgage

Everyone deserves a fair shot at homeownership or a refinance, which is why Better Mortgage works to help you save money and make the process simple, streamlined, and ultra accessible from start to finish. A Better Mortgage pre-approval takes as little as 3 minutes and doesn’t require a hard credit check.

If you’ve started thinking about buying a house, you’ve probably heard the term “credit score.” This number tells a bank how likely it is that you can pay back your loans, and it’s based on things like the amount of debt you have, loans you’ve had in the past, and your repayment history. The higher your score, the more likely it is that a bank will lend you money.

You’ve earned your score by taking good care of your finances, so you want to be careful about anything that might take away from it. And one thing that can subtract points from your score is a credit inquiry.

“But wait!” you say. “Wasn’t I supposed to get pre-approved for my mortgage before I start looking at houses? And doesn’t a pre-approval count as a credit inquiry?”

Good question, but when it comes to pre-approval, your credit score is safe. Here’s why.

Not All Inquiries are alike

Soft inquiries just check to see what your number is. They don’t have anything to do with a loan or line of credit. For example, you might look up your own number just out of curiosity, or someone who’s considering hiring you might do so as part of a background check. Soft inquiries don’t affect your credit score at all. In fact, we recommend checking your credit score now so you can see where you stand and have a chance to correct any errors you may find. You can check your score at www.annualcreditreport.com. It’s fast, free, and easy.

Soft Inquiries:

You check your own credit
One of your current creditors checks your credit
A company checks your credit to see if you qualify for preapproval offers
You get a new job and your employer pulls your credit report as part of its screening process

Hard inquiries are different. With these, a lender is checking on your financial history to decide whether to give you a loan or line of credit and what kind of rates to charge you. If you’re looking for loans or lines of credit, it tells a lender that you’re thinking of taking on more debt, which can affect how much you’ll be able to pay back on your mortgage. That’s why these kinds of inquiries can subtract from your credit score—especially if you’re applying for a lot of loans at once.

Hard inquiries:

You go car shopping and apply for financing at the car dealership and they pull a credit report on you
You get a preapproved credit card offer in the mail and respond to the offer
You contact your credit card company and request a credit line increase. The company pulls a fresh credit report on you to help determine if they will grant the line increase.

Pre-approvals are treated differently. First of all, you have to make an inquiry in order to get a mortgage. It’s a necessary part of the process, so credit agencies expect you to make an inquiry at this time. And lenders understand that you need to shop for the best rate, especially when it comes to a big loan like a mortgage—but in the end, you’ll only end up with one mortgage loan. Because of this unique situation, there’s a special rule that lets you apply for mortgage pre-approval at several lenders within a 45-day window. As long as your last request is 45 days or less after the first, all of your inquiries will only be counted once to avoid denting your credit score.

Should You Get a Pre-Approval?

If you’re getting close to buying a home, the answer is yes. A pre-approval gives you a good idea of how much house you can afford so you can look within the right price range. It shows sellers that you’re serious—and ready—to buy. And it helps you get all of your paperwork lined up, so once you’ve found the perfect home, you can be confident that you can get a mortgage and close on it much faster.

How do you get the ball rolling? An Amerifirst loan officer will be happy to help. We specialize in working with first-time buyers, and we can walk you through every step of the pre-approval process to make things easy.

Just remember, if you’re shopping for pre-approvals or already started the mortgage process, this is not the time to apply for car loans, store credit cards, and other lines of credit. To protect your credit score, wait until after you buy your home instead.

Does mortgage pre

Yes, a pre-approval is a hard inquiry. Applying for a pre-approval through a mortgage lender is a standard step in the mortgage approval process because it involves lenders looking at more detailed information. Because lenders give loans for large amounts of money, hard inquiry credit checks are routine.

Does pre

A mortgage preapproval can have a hard inquiry on your credit score if you end up applying for the credit. Although a preapproval may affect your credit score, it plays an important step in the home buying process and is recommended to have. The good news is that this ding on your credit score is only temporary.

Do pre approvals hurt your credit score?

Inquiries for pre-approved offers do not affect your credit score unless you follow through and apply for the credit. If you read the fine print on the offer, you'll find it's not really "pre-approved." Anyone who receives an offer still must fill out an application before being granted credit.

Do mortgage lenders do a hard pull?

Your credit score might take an initial hit when you apply for a mortgage because the lender will have to open up a hard inquiry into your credit report. A hard inquiry (a.k.a., a “hard pull”) is when a lender pulls your credit report from one of the three main credit bureaus (Experian, Equifax or TransUnion).